Applied Underwriters, an insurer owned by Warren Buffett’s Berkshire Hathaway, has agreed to a workers compensation insurance case settlement. The agreement involves providing Californian consumers with full disclosure about the product. The insurance company’s goal is to start selling plans again following a state review of alleged abuses.

A major component of the settlement requires Applied Underwriters “to stop the bait-and-switch marketing tactics.”

Many employers registered complaints from having been sold workers compensation insurance through bait-and-switch tactics. Those companies found themselves saddled with “costly and complicated policies” for workers compensation coverage, said the California Department of Insurance in a statement it released on the matter.

Applied Underwriters is facing a significant number of lawsuits from employers angry with the fact that their costs are based on the claims they submit. Dozens of companies have come forward to state that the insurance company sold them workers compensation policies that had not received regulatory approval. Furthermore, those businesses allege that they received unexpected and surprisingly large bills. Their complaints stated that the bills were based on calculations meant to favor the insurer.

Some of Applied’s workers compensation insurance plans are banned by regulators in Wisconsin, Vermont and California.

In response to the accusations, the workers compensation provider said its coverage provides employers with savings and that their customers were made fully aware of the terms of the policies. Jeffrey Silver, the lawyer representing Applied Underwriters, also underscored the fact that the companies that sued the insurer represent only about one in every 400 of the policies sold. He also stated that the renewal rate is approximately 90 percent.

Silver explained that the litigating companies were unhappy with their plans because they had filed claims that caused their premiums to rise. He accused those companies of “taking advantage of a regulatory situation” in order to avoid having to pay their bills.

Applied Underwriters’ struggles are rooted in a 2014 complaint filed in California by one of its policyholders, Shasta Linen Supply. At that time, the linen rental company stated that it had received a quote from the insurer in 2009 for three years of coverage. However, at the close of that term, despite having paid over $900,000 in coverage, the company which employs about 60 people continued receiving bills from the insurer, which was demanding another $244,213. According to Shasta, these additional fees had not been fully explained to them at the time that they took out the coverage and were not within the scope of the state-approved policy. California Insurance Commissioner Dave Jones agreed with Shasta.